Crypto users who thought they had found a way into the hottest IPO in years through tokenized SpaceX stock discovered on Friday that the shares would not be arriving. Binance Wallet, Bybit, and Bitget Wallet all canceled their tokenized SpaceX offerings after xStocks, the tokenized equity provider behind all three products, failed to deliver the underlying assets. According to CoinDesk, xStocks and its partners had gathered more than $1 billion in customer orders tied to SpaceX access before the mechanism collapsed.

Bybit had launched the earliest campaign on June 7, introducing SpaceX as the first offering on its IPO Express product and telling users they could “participate in the SpaceX IPO subscription using crypto and gain early access before spot trading begins.” Binance Wallet followed with its own SPCXx campaign on Thursday, describing it as a “non-guaranteed subscription process” through xStocks. Bitget Wallet told users on June 9 that they could “access tokenized stock exposure to SpaceX” through the same provider.

When SpaceX actually went public on Friday, none of the crypto allocations materialised. Bybit told users that “due to the xStocks’ inability to deliver the underlying assets,” it had received no allocation and no subscribed SpaceX shares would be issued. The exchange offered automatic refunds plus a reward calculated at 10 per cent APR over a fixed four-day period. Binance canceled its campaign the same day, refunding all locked USDC and promising to distribute $1 million worth of its own bStocks SpaceX tokens equally among participants by June 18.

The scale of the failed allocation was significant. According to The Defiant, Binance’s SPCXx campaign alone attracted $557 million in on-chain subscriptions across nearly 27,700 addresses before being unwound with nothing distributed. Bitget Wallet also announced full refunds for affected users. Community reports indicated that Kraken customers fared somewhat better, with some subscribers receiving roughly four shares’ worth of tokenized SpaceX exposure, far less than requested but more than zero.

The allocation crunch was not entirely unique to crypto. SpaceX’s $75 billion IPO was more than four times oversubscribed, with approximately $250 billion in total demand. Traditional brokerage customers also received fewer shares than they requested, though Fidelity, Charles Schwab, and SoFi all completed at least partial allocations for eligible participants. The difference is that crypto customers got nothing at all.

The failure exposed a structural problem with how these products were built. Crypto exchanges did not have direct relationships with SpaceX’s underwriters or the IPO allocation process. Instead, they relied on xStocks as an intermediary to secure and deliver the underlying shares, adding an extra link in the chain between the customer and the asset. When that intermediary could not obtain shares from the massively oversubscribed offering, the entire tokenized product collapsed regardless of how much demand the exchanges had aggregated.

Even crypto industry insiders found the arrangement problematic. Tom Farley, CEO of crypto exchange Bullish, posted on X that “maybe tokens should actually be approved by the issuer and therefore be the actual underlying share.” ARK Invest’s Lorenzo Valente had flagged the issue earlier on Friday, posting that he had “seen 40 exchanges and wallets advertising SpaceX stock” and asking, “What exactly am I buying?”

Not every tokenized SpaceX product failed. The xStocks SPCXx token did eventually go live after the IPO, and CoinGecko listed tokenized SpaceX products at a combined market capitalisation of nearly $50 million on the first trading day. That figure is barely a rounding error against SpaceX’s roughly $2.1 trillion public valuation. Meanwhile, PreStocks’ Solana-based SpaceX token was trading at a steep discount to the actual public shares, a gap the issuer had warned about due to a six-month lockup on the underlying shares.

The episode arrived as the SEC had already delayed a plan, reported by Bloomberg in May, to allow crypto firms to trade tokenized versions of US stocks. Tokenized equities are being promoted alongside stablecoins as evidence that crypto is finding mainstream adoption, but the SpaceX debacle demonstrated how much of that adoption still depends on centralised issuers, custodians, and allocation pipelines. The original pitch for Bitcoin was to reduce reliance on trusted financial intermediaries. What happened on Friday was a reminder that tokenized stocks, by their nature, cannot escape them.

TL;DR

Palo Alto Networks shareholders have rejected executive pay seven times since 2015, the most in the S&P 500, yet CEO Nikesh Arora’s package is valued at nearly $100 million. The stock is up 800% under his leadership, but ISS and institutional investors cite structural pay concerns and a 442-to-1 CEO-to-worker ratio.

A majority of Palo Alto Networks shareholders have voted against the cybersecurity company’s executive compensation packages seven times since 2015, a record that makes it the most rejected pay programme in the S&P 500 and the third-most in the Russell 3000. The most recent vote came in December, when less than half of shareholders supported a package valued at nearly $100 million for CEO Nikesh Arora, a figure that would exceed the compensation of Jamie Dimon at JPMorgan Chase, Tim Cook at Apple, and Satya Nadella at Microsoft, all of whom run companies at least three times larger by market capitalisation.

The votes are non-binding. Palo Alto Networks is not required to act on them, and it has not meaningfully changed course despite seven rejections in 11 years. The company’s board called Arora “a world-class, exceptionally talented CEO whose focus and interests fully align with those of our shareholders,” noting that the stock has added more than $100 billion in market capitalisation since he took over in 2018.

The performance argument

Arora’s defence is straightforward: he has delivered. Palo Alto Networks shares have gained nearly 800% since 2018, roughly four times the S&P 500’s return over the same period. Annual revenue has quadrupled to more than $9 billion. The company has been transformed from a firewall maker into one of the world’s largest cybersecurity platforms, competing at the top tier of the enterprise security market alongside CrowdStrike, Microsoft, and Fortinet. Arora oversaw the acquisition of CyberArk Software earlier this year in a deal valued at approximately $25 billion.

“You can correlate the amount I’ve gotten paid to the $100 billion,” Arora said in an interview. He also noted that his compensation structure has not always worked in his favour: in fiscal 2024, he said, he missed his targets and “got paid zero,” earning only his $1 million base salary and $1.2 million in non-equity incentives. “I worked for free for 12 months,” he said.

Why shareholders keep voting no

The persistent opposition reflects specific structural concerns rather than a blanket objection to high pay. The proxy advisory firm Institutional Shareholder Services has recommended that investors vote against Palo Alto Networks’ compensation packages in all but three of the past 11 fiscal years, warning that an “unmitigated pay-for-performance misalignment exists” and that Arora’s target compensation was nearly twice that of peers. Glass Lewis urged rejection in the last three fiscal years.

The Florida State Board of Administration, which oversees investments for the retirement fund of public employees, has been particularly vocal. Michael McCauley, senior officer for investment programmes and governance, cited “insufficiently challenging goals” within the pay packages and “weak” links between actual payouts and shareholder returns. The question of how corporate wealth is distributed between executives and workers is not unique to Palo Alto Networks, but the company’s CEO-to-worker pay ratio of 442 to 1, against a US corporate average of 281 to 1, makes the disparity particularly stark.

The company’s “moonshot” pay structure is part of the problem. Palo Alto Networks ties big payouts to gains in revenue, profitability, and other financial metrics, with maximum payouts set at four times the target (reduced from six times after shareholder pushback). Brian Bueno of Farient Advisors called this “very unusual,” noting that most companies cap performance-based stock awards at two times the target.

The governance gap

Say-on-pay votes were introduced under the Dodd-Frank Act after the 2008 financial crisis, intended to give shareholders meaningful input on executive compensation. In the enterprise software sector, where competition for executive talent is intense and stock-based compensation dominates, the votes have had limited impact on actual pay levels. Only 1.4% of Russell 3000 companies saw their say-on-pay votes fail in 2025.

Palo Alto Networks is an outlier precisely because the stock performance is so strong. Research suggests shareholders tend to tolerate high pay when returns are strong, making the seven rejections at a company with 800% stock gains genuinely anomalous. The pattern suggests that institutional investors are objecting not to the outcome (exceptional returns) but to the mechanism (a pay structure they consider insufficiently rigorous and excessively generous relative to peers).

The cybersecurity industry is consolidating rapidly, and Arora’s track record of platform-building and acquisitions makes him difficult to replace. That leverage dynamic, a CEO who has delivered extraordinary results and cannot easily be substituted, is exactly what non-binding say-on-pay votes were not designed to address. Every enterprise software company is racing to embed AI, and Palo Alto Networks is expected to report record revenue when it posts quarterly results later on Tuesday. The shareholders will keep voting no, and the pay will keep flowing.

TL;DR

Space stocks are selling off sharply as the SpaceX IPO approaches and a Blue Origin rocket explosion rattles investor confidence. The Procure Space ETF dropped 11% in two sessions, with Rocket Lab, Intuitive Machines, and AST SpaceMobile falling 17-23%.

A rally that carried space-related stocks to extraordinary gains this year is showing serious cracks. The Procure Space ETF, which trades under the ticker UFO, has dropped almost 11% in just two sessions. Intuitive Machines and Rocket Lab have each fallen roughly 17%. AST SpaceMobile, which had become a retail-trading favourite, has sunk nearly 23%. The selloff extends losses that began late last week and accelerated on Monday.

Two catalysts converged. On Thursday, Blue Origin’s reusable New Glenn rocket exploded during a routine hot-fire test at Cape Canaveral, a spectacular failure that damaged the launchpad and reminded investors that the space business remains physically dangerous and technically unpredictable. On Friday, SpaceX cut its IPO valuation target to $1.8 trillion from at least $2 trillion, signalling that even the sector’s dominant player is acknowledging that market expectations may have run ahead of reality.

The proxy trade unwinds

The space stock rally of the past several months was driven substantially by the anticipation of SpaceX’s record-setting IPO. With SpaceX private, investors who wanted exposure to the space economy bought publicly listed proxies: Rocket Lab for launch, Intuitive Machines for lunar services, AST SpaceMobile for satellite communications, Redwire for space infrastructure. As SpaceX’s IPO filing moved from rumour to reality, these proxy stocks surged on the assumption that a rising tide would lift all rockets.

The Procure Space ETF is still up almost 60% year to date despite the two-day rout. Rocket Lab entered the selloff up 413% over the past year. But Bloomberg Intelligence analyst George Ferguson identified the structural problem: once SpaceX is actually available to buy, investors may dump the proxies in favour of the real thing.

“The market may be worried investors that want exposure to space will drop the currently listed names for SpaceX, as it has a much larger and better record of space launches,” Ferguson said. “At similar valuations, SpaceX would likely be the better company to own.”

Valuations detached from financials

Jefferies analyst Greg Konrad underscored the disconnect on Monday by downgrading Redwire from buy to hold, writing that the stock’s recent gains “do not correlate with financials” and instead reflect “multiple expansion on the excitement of the SpaceX IPO that has shed a positive spotlight on the space sector.” Redwire had nearly tripled in the previous month to a record high before dropping 16% on Monday. SpaceX’s own S-1 filing revealed the financial scale that makes comparisons with smaller space companies difficult to sustain.

AST SpaceMobile trades at roughly 260 times estimated 2026 sales. Rocket Lab, despite its operational progress with the Electron and Neutron rockets, carries a valuation built on optimism about future government and commercial contracts rather than current revenue. The space sector has followed a pattern familiar from the AI boom: a narrative-driven rally that prices in years of growth before the revenue materialises.

The Blue Origin factor

The New Glenn explosion added a visceral dimension to the correction. The rocket erupted during a hot-fire test of its seven BE-4 first-stage engines, sending debris across the Cape Canaveral launchpad and causing heavy damage to the infrastructure. While SpaceX has experienced its own launch failures, the Blue Origin incident reminded public market investors, many of them new to the space sector, that rockets are not software. Hardware failures destroy expensive assets instantly and set development timelines back by months or years.

“That implies valuations are a bit rich,” Ferguson said. The Blue Origin explosion was “a reminder that this is a difficult business.”

Virgin Galactic’s divergence

Not every space stock fell. Virgin Galactic soared as much as 44% on Monday before paring gains to as little as 1.1%, a move that illustrated the speculative, momentum-driven character of the sector rather than any fundamental shift in the company’s business. SpaceX’s lowered valuation target may have triggered short-covering in some names while accelerating selling in others.

The question for the space sector is whether the SpaceX IPO, expected to price in early June with marketing beginning on 4 June, draws capital into the sector or pulls it out of everything that is not SpaceX. If institutional investors consolidate their space exposure into the one company with a proven business model, consistent launch cadence, and Starlink revenue, the proxy stocks that rode the wave up could face sustained pressure even as the overall sector grows.